Commission to focus on ways to manage benefit costs

You’re in business and you see that your employee health benefits costs are rising 15 percent a year.

So, would you prefer something more affordable? How about a 2.8 percent annual increase?

This can be done.

Wisconsin-based Serigraph Inc., a company with 1,000 employees and $40 million in annual sales, has done it.

John Torinus, Jr., the company’s chairman, will be in Anchorage Oct. 11 to tell the Alaska Health Care Task Force, a state advisory panel, how Serigraph did it.

Torinus will also address members of Commonwealth North at a special luncheon that same day. Both meetings at the Hilton Hotel in Anchorage and are open to the public, according Deb Erickson, director of the health care commission and Jim Egan, Commonwealth North’s executive director.

Commonwealth North, an Anchorage-based business and public policy group, has had task force members working on health care for a long time. The health care commission’s meeting will actually span two days, but Thursday, Oct. 11 will be the main event.

The commission typically focuses each of its bimonthly meetings on a theme, and the theme for the October meeting is on what employers can do to better manage health care costs and help employees stay healthy.

“We’ll want to look at what role there could be for government, particularly the state, to give support for employers,” Erickson said.

Serigraph is one company that is pioneering a more aggressive approach to management of employee health care benefit costs. Its approach, much of it centered on employee wellness initiatives and employees “taking ownership” of their health, is attracting a lot of attention.

Serigraph’s strategy also includes working for transparency in medical cost information, putting emphasis on primary care to keep people out of expensive hospitals, helping employees navigate the maze of medical pricing information, and use of “medical tourism,” or travel to other locations where quality is high but costs may be lower.

“Many employers are beginning to embrace control of health care costs as part of a business strategy, Erickson said. Serigraph is an outstanding example, but some Alaska employers are following this path.

One of them is Providence Health Systems, which is a major health care provider but also a major employer, Erickson said. Providence started developing an employee health management program four years ago and now has an on-premises primary care clinic for its employees.

The clinic makes it easy for employees to get primary care. While Providence is a major health care provider, it does not actually offer primary care at its main hospital in Anchorage.

Access to primary care is critical.

“That’s one thing that the (health care) commission learned in its first year,” Erickson said. “In other countries where overall health is better and costs are lower, all emphasize primary care, and the health outcomes are better.”

Providence Health Systems also has a human resources manager assigned to the employee health issue. Tammy Green is director of Providence’s “Well-Being and Absence Management” unit. She will also address the health care commission at its October meeting.

Many larger Alaska employers like Alyeska Pipeline Service Co. and the City and Borough of Juneau have employee health programs, embracing wellness initiatives, though not to the degree Providence is going to for its employees.

Premera Blue Cross Alaska, which provides health insurance coverage for a wide range of employers, has also focused on similar programs for medium-sized and even small firms.

A good part of the Oct. 11 health commission agenda is devoted to Alaska employers dealing with health care – the entire afternoon is devoted to discussions after Torinus’ presentation at noon – but other items will be discussed in the morning.

Among those will be a presentation on a possible “all-claims” database for Alaska that would provide accurate and accessible information on costs and cost trends.

Erickson said one of the commission’s objectives is to improve the transparency of health care cost data for consumers and also health care planners and providers. Several states have these and several are working on them, she said.

The commission has hired a consulting group, Freedman Healthcare, to assess the feasibility and usefulness of such as system in Alaska, and preliminary findings will be presented to the commission at the October meeting.

The concept is for all payers – private insurance companies, self-insured employers, Medicaid and medicare and, hopefully, defense department agencies – to provide information on the cost of procedures to a common data base.

“One objective is to increase transparency for the public. New Hampshire has a program, for example, that provides information to the public through a website so that consumers can see what they can expect to pay for a procedure with different providers in the area,” Erickson said.

The information, in a common database, is also needed to do the financial analysis for medical “payment reform,” where payments are tied to improvements in outcomes, in a patient’s health, compared with the current “fee for service” system where health providers are paid essentially by the procedures they do, and the number of them.

Another report at the commission’s October meeting will be made by Milliman Inc., in a continuation of a study the firm is doing on Alaska health care pricing and reimbursement. Last year Milliman reported on comparison of hospital and physicians charges with providers’ charges in the Lower 48.

The latest focus for Milliman is on the pricing of pharmaceuticals. An update of the study will be made by the firm.

The second day of the commission meeting, Oct. 12, is devoted to updates from state officials on issues the group has previously worked on including evidence-based medicine; health information infrastructure; transparency and payment reform; the patient-centered Medical Home initiative, and updates on federal health care reform including the possible expansion of Medicaid in Alaska and the health benefits exchange system.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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